How much do low-cost airlines earn from ticket sales and where does the rest of the revenue come from

Low-cost airlines started a few years ago to separate the costs, so that a traveler has to pay separately for the plane ticket, baggage or seat. This strategy has brought profits for companies operating in this segment.

A little over half of the revenues of the largest local air operator, Wizz Air, are obtained from the sale of plane tickets, more precisely a percentage of 56%, according to the annual income report of Wizz Air. The rest of the income is obtained from the sale of auxiliary services, i.e. from the costs for luggage, seats, food on board and others.

“Ancillary revenues mainly come from baggage fees, reservation fees/currency conversion fees, airport check-in fees, fees for various convenience services (eg priority boarding, extended legroom and reserved seats), loyalty program membership fees, commission for the sale of on-board catering, accommodation, car rental, travel insurance, bus transfers, premium calls, co-branded cards and repatriation”, the Wizz Air report states.

The Hungarian aviation group achieves total revenues of 5 billion euros, of which 2.2 billion euros represent these auxiliary revenues. Ryanair, another important player on the local market, has a 68% revenue percentage from ticket sales, the rest being ancillary revenue. Specifically, Ryanair has a business of 14.4 billion euros, of which 4.3 billion euros represent ancillary revenues, according to the company’s annual income report.

(source: AFP)